A sigh of relief for Wind energy

Chennai:

The budget has brought new lease of life in the wind sector by reintroducing generation based incentives and provide Rs 800 crore to the ministry of new and renewable energy for the purpose.

Chairman of Indian Wind Turbine Manufacturers Association Ramesh Kymal said here that the announcement has brought some relief to the wind energy sector.

“We are relieved and glad that wind energy has got the attention of the government,” he said.

Interestingly this comes after Minister for New and Renewable Energy Farooq Abdullah said the generation based incentive of 50 paise per unit of electricity fed into the grid with a cap of Rs 62 lakh per mega watt which came to an end on April 1, 2012 is not enough. He had assured the wind energy sector in Chennai that he will take it up with Finance Ministry and planning commission to take it to 80 paise per unit without any upper cap for 10 years.

But the budget has failed to enthuse oil firms and solar industry who termed the budget disappointing.

EDAC Engineering senior vice president and convenor of energy panel Federation of Indian Chamber of commerce and Industry Tamil Nadu State Council M Nandakumar said the budget failed to address the needs of energy sector.

“We are disappointed as lots of issues which need aggressive push from the Centre were ignored in the budget,” he added.

He said lot of power plants are lying idle and there is a need to revive them. While welcoming the generation-based incentives for wind-energy projects, he said there are no major announcements for non-renewable sector. He said the budget hardly took note of the solar energy sector.

K Ravichandran, senior vice-president and Co-head corporate sector rating, ICRA Ltd, said that there are no major announcements in the sector  except a new policy for shale gas, review of gas pricing regime and clearance of stalled new exploration  licencing policy (NELP) blocks. While the industry was waiting for detailed action plans on the recommendations of Rangarajan Committee, only a brief reference has been made as above. Perhaps detailed announcements on the same will be made later during the year, which will go a long way to address the concerns of the industry. As regards, subsidy for the public sector unit Oil Marketing Companies (OMCs), adequate provision seems to have been made as seen as by provision of Rs 96891 crore for 2012-13 revised estimates, which should account for around 60 per centof Gross Under Recoveries (GURs) of the industry.

The balance 40 per cent should be manageable with upstream companies largely bearing the same and a small share to be borne by the companies themselves. Subsidy provided for 2013-14 budget estimates is Rs 65012 Cr which should be sufficient if the decision of diesel price partial decontrol is fully implemented as envisaged, as diesel was accounting for almost 60 per cent of GURs for the industry. However, if crude oil prices were to further rise and under recoveries persist on diesel, more subsidy will be required.